The TV Industry As We Know It May Really, Finally Be Entering A Death Spiral

In the past six months, something has changed with the TV
industry, according to AOL CEO Tim Armstrong.

On stage at our Ignition conference, Armstrong said he recently
heard from an advertiser who said he got a rebate for his TV ad
budget because the ads weren't going to be filled. The advertiser
needed to spend the extra money digitally as quickly as
possible.

It's unclear whether this was just a one-time blip or the start
of something different. Armstrong seemed to believe the
latter. He thinks digital
video advertising is finally starting to suck dollars from TV
advertising.

New data from Nielsen explains why this is happening. Last
quarter,
TV viewing was down 4%, while video streaming was up
60%.

When an agency is telling people to shift their budgets,
it's a big deal. It means the money that's been supporting
traditional TV is going to go towards digital properties. As that
money flows out of traditional TV, the traditional TV industry is
going to struggle to do what it's done for years.

As for whether this is just a blip or a long-term thing,
Armstrong told us that he recently hosted Thanksgiving at his
house. He had a bunch of kids over, from teenagers to young
adults in their 20s. He saw them all sitting around in the living
room watching video on their phones instead of looking up at the
TV.

Are those kids going to suddenly change and start watching
regular TV when they get older? Probably not.